TAIPEI (Reuters) – Taiwan Semiconductor Manufacturing Co, the dominant maker of advanced chips used in artificial intelligence applications, is expected to report a 42% rise in third-quarter profit on Thursday on rising demand.
The world’s largest contract chipmaker, whose customers include Apple and Nvidia, has benefited from the rise of AI across a broad spectrum of industries.
TSMC will report net profit of T$300.1 billion ($9.33 billion) for the quarter ended September 30, according to an LSEG SmartEstimate of 23 analysts. SmartEstimates give more weight to analyst forecasts that are more consistently accurate.
This estimate compares to the third quarter 2023 net profit of T$211 billion.
TSMC last week reported an increase in third-quarter Taiwan dollar sales, easily exceeding market expectations. It will provide fourth-quarter revenue guidance in US dollars.
However, on Tuesday ASML, the world’s largest supplier of chip-making equipment to companies such as TSMC, predicted that sales and bookings for 2025 will be lower than expected due to continued weakness in parts of the chip market, hurting the Dutch company’s shares to the biggest one-day decline since 1998. .
On Wednesday, TSMC shares closed 2.3% lower at T$1,045, although not far from their all-time high of T$1,080 on July 11.
TSMC will update its outlook for the current quarter and full year, including capital spending, at its quarterly results from 6am GMT on Thursday, as it races to expand production.
The chipmaker is spending billions of dollars building new factories abroad, including $65 billion on three factories in the US state of Arizona, although it has said most production will remain in Taiwan.
At its last earnings call in July, TSMC raised its full-year revenue forecast and revised its capital expenditure plans for this year to between $30 billion and $32 billion, compared to a previous forecast of $28 billion to $32 billion.
The second half of the year is traditionally the peak season for Taiwanese tech companies as they rush to supply customers ahead of the year-end holiday season in key Western markets.
The rise of AI has helped boost the price of shares in Asia’s most valuable company. TSMC’s Taipei-listed shares are up 76% so far this year, compared with a 28% gain for the broader market.
TSMC, commonly referred to in Taiwan as the “sacred mountain that protects the country” for its crucial role in Taiwan’s export-dependent economy, faces little competition, although both Intel and Samsung are seeking to challenge its dominance.
($1 = 32.1740 Taiwan dollars)
(Reporting by Ben Blanchard; Editing by Christopher Cushing)
